Hundreds of thousands of individuals will get higher wages starting today, as the Real Living Wage will increase by 10%.
The increase will help over 460,000 people working for 14,000 firms who pay the voluntary rate.
The Living Wage Foundation announced that its rates will climb to £12 per hour outside of London, a £1.10 increase.
In the capital, it will climb by £1.20 to £13.15 per hour.
The 10% increase takes effect on Tuesday, and firms who sign up will have six months to apply the new rates.
The Real Living Wage is voluntary and applies to everyone over the age of 18, compared to the statutory National Living Wage which stands at £10.42 an hour for over 23s.
The National Minimum Wage is £10.18 for 21 to 22-year-olds, and £7.49 for 18 to 20-year-olds.
The minimum wage rates are lower for younger workers.
A full-time worker earning the new Real Living Wage will earn £3,081 a year more than someone on the National Living Wage, and an extra £5,323 in London, the foundation said.
Research by the Living Wage Foundation found that despite easing inflation, the cost of living crisis is still being felt by low-paid workers, with 50 per cent worse off than a year ago.
In its survey, more than two in five low-paid workers said they regularly use a food bank and almost as many reported falling behind on household bills.
Living Wage Foundation director Katherine Chapman said: “As inflation eases, we cannot forget that low-paid workers remain at the sharp end of the cost-of-living crisis.
“Low-paid workers continue to struggle with stubbornly high prices because they spend a larger share of their budget on food and energy.
“These new rates are a lifeline for the 460,000 workers who will get a pay rise.”
Chancellor Jeremy Hunt said earlier this month that the National Living Wage will be increased to two-thirds of average earnings, or more than £11 per hour, beginning in April 2024.